Efficient Public Sectors for Better Governance

Opening Remarks by Angel Gurría, Secretary-General OECD

Paris, France

21 November 2012

(As prepared for delivery)

Good morning, Ladies and Gentlemen,

Welcome to the OECD and our first Global Forum on Public Governance. This Forum is designed as a platform for dialogue between the OECD and partner countries. I am therefore delighted that 63 countries are represented today – an excellent start for what I am certain will become an important regular event.

I am also pleased to see the Chairs of three OECD committees (Public Governance, Development Assistance (DAC) and Regulatory Policy), as well as participants of the “New Consensus” on more effective institutions for development, signed in Busan last year. This underlines our intention to make governance a horizontal topic across OECD Committees and Directorates.

With such a wide range of participants and expertise, we can look forward to a day of rich discussions on building the quality institutions that we need.

Institutions matter (more and more)

Our countries are still going through a difficult period. This can be said for both our members and partner countries. Many of our members are struggling to recover from the worst economic crisis of our lifetimes, while weak demand in the advanced economies is dampening growth around the world. In this challenging and unpredictable economic environment, institutions matter more than ever - for recovery, for growth, for well-being, for trust.

Too often, we look only at “what” needs to be done without paying enough attention to “how” to reform, or “whom” to involve.

The lessons from the past crises underscore the need to look at broader national governance systems when we embark on institutional reforms. To ensure the effective functioning of governments and the equitable and efficient distribution of public resources we need: functioning parliaments, vigilant audit institutions, efficient courts and a vibrant civil society. This is why I am pleased to see so many representatives of these institutions in the audience today.

The root causes of this crisis included serious weaknesses in governance and regulatory structures which often led to failures of judgment, implementation and coordination. As we take stock of these important lessons learnt, we need to help governments in strengthening their decision making processes upon which legitimate and decisive actions depend.

The OECD has been promoting a broad range of initiatives to help governments advance in this direction. Central to these efforts is the OECD’s New Approaches to Economic Challenges initiative, which recognises that institutions and the political economy of reform need to be better reflected in the way we try to improve the working of market economies and reduce inequalities.

The question is: How do we build an efficient public sector?

It is not enough, however, to recognise the importance of good governance and to propose a theory of functioning institutions. Rather, we need to take active steps to improve public policies and services in response to the increasing needs and demands from citizens and businesses.

Indeed, while OECD member and partner countries may differ significantly in their institutional frameworks, their concerns are very much alike when it comes to advancing public sector innovation, productivity and transparency. For example, innovations related to accountable institutions, performance budgeting, results-based management and open government are advancing at equal speed in both member and partner countries.

The increasing use of collaborative on-line tools is a great example: in Canada, the Department of Foreign Affairs and International Trade uses theses tools to include non-traditional actors in policy design; while in Egypt, the Ministry of State for Administrative Development uses an on-line platform to help citizens vote.

We can also learn from each other; a prime example is the cooperation between the United Kingdom and Indonesia who are co-chairing the “Open Government Partnership” on transparent, participatory and collaborative governments.

We know that there is no ‘one size fits all’ solution, that there are many different ways to strengthen institutions and to promote inclusive growth. But there are common threads and good practices in building smart States and effective institutions.

Let me highlight four key areas from our comparative work on governance in member and partner countries.

1. Building strategic State capacities to deal with policy challenges

Building a strategic State is crucial in ensuring that governments are prepared to deal with socio-economic challenges. This requires the ability to set priorities, to align resources with priorities, and to implement policies. The OECD is undertaking Public Governance Reviews in OECD and partner countries, such as Colombia and Kazakhstan, to develop the strategic State capacities. One lesson we learned from these reviews is the need for centres of government to develop a robust strategy setting and steering capacity as well as the authority to work effectively with different bodies of government.

The OECD has developed regulatory reform principles and is undertaking reviews for better regulatory frameworks for inclusive growth. In September, I launched the Indonesia Regulatory Reform Review in Jakarta. We suggested ways of streamlining policy-making processes and producing a transparent and comprehensive regulatory framework. This should increase market openness and ensure economic opportunity throughout a dispersed archipelago of over 17,000 islands. Through our territorial development work we support a place-based approach to inclusive growth by looking not only at the most dynamic regions of a country but also helping to raise the development potential of less-developed regions.

3. Improving service delivery

Accessibility and quality of public services are essential for inclusive growth. The OECD Observatory of Public Sector Innovation supports governments in identifying innovative ways to deliver public services and reach out to communities. Australia, for example, has launched the Next Step online community to better assist parents going back to work after years out of the workforce. Innovative practices like this one can be useful for other countries looking to reform public service delivery.

The next edition of our flagship publication “Government at a Glance” to be launched in October 2013 will provide international benchmarks for key aspects of service quality. This will help in improving public service delivery, particularly in such critical areas as health and education.

4. Promoting open, clean and responsive governments

Only open and clean governments can gain public trust. Through our CleanGovBiz initiative, we provide a toolbox for diagnosing weaknesses and implementing better policies. Together with the United States Government, the OECD supports countries in joining the Open Government Partnership, particularly in the MENA region.

Ladies and Gentlemen:

Citizens are losing trust and confidence in governments all over the world. According to the 2012 Annual Global Trust Barometer by Edelman, people blamed their governments – more than any other institution – for the financial and political crises they endured in 2011. In most of the countries surveyed, government is now trusted by less than half to do what is right.[i] This is a very dangerous phenomenon. It is time to reverse these trends. It is time to win confidence back.

This Forum can make a big contribution. I am sure that your discussions will enrich our work and contribute to the OECD’s good practice framework on Better Governance for Inclusive Growth. This framework will offer a palette of policy options and good practices. It will help policy-makers deal with the urgent need of reinventing government, addressing governance deficits and finding innovative solutions to governance challenges. It can also serve as a critical reference for the development community in assessing governance and promoting governance reforms.

But let us not forget the context of our work. In the end it boils down to making sure that governments deliver what they are paid for by their citizens: to design and deliver better policies for better lives.